Quick overview

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Klarna dropped below the IPO price for the first time just weeks after a highly anticipated trading debut due to heightened competition from rivals and concerns about the direction of interest rates. Friday saw the stock of the digital payments company drop to $39, below the listing price of $40.

 

Klarna began trading on September 10 after a double-digit oversubscribed offering that was priced above the marketed range, raising roughly $1.58 billion for the company and some of its backers.
The stock’s decline coincides with a record-breaking surge in US technology stocks, which paused this week after a string of better-than-expected economic reports raised concerns about the likelihood of additional Federal Reserve interest rate cuts. For businesses that are expanding quickly, lower borrowing costs are essential.

According to Bloomberg Intelligence analyst Diksha Gera, “fintech stocks, including Klarna, are sensitive to macroeconomic factors like interest rates and regulatory developments.”. The slump also follows reports that valuations of several rival fintech companies that have remained private for longer have increased.

“Even though the Fed started cutting rates in 2025, any hint of slower-than-expected cuts or yields rising could pressure valuations and sentiment as higher yields can increase their borrowing costs,” she said, adding that Klarna’s IPO was priced richly to begin with. Stripe, Inc. is now valued at $106.7 billion, whereas Revolut Ltd. intends to secure a $75 billion valuation.

Checkout.com, another European competitor, revealed a new $12 billion valuation along with a tender offer to employees.